Proof of the power of referrals

In 2012, BRANZ ran the second New House Owners’ Satisfaction Survey. It focused on new homeowners’ assessments of builder performance in order to assist work on building industry performance measures.

It’s also a good tool for builders to find out what’s most important to their customers and how they decide who to trust to build their homes.

BRANZ received 1,258 survey responses (29%), which is a large enough sample size to provide accurate results. Overall, the vast majority of new house owners said they would recommend their builder – and those with good communication and project management skills scored the highest.

The good and the bad

New house owners were first asked about their satisfaction levels and how they would rate their builder on ten different aspects.

The highest satisfaction levels were for:

• Overall quality of the home.
• Service during the build.
• Standard of finish.

The aspects that scored lowest were:

• Service after moving in.
• Fixing of defects after occupancy.

Questions also covered input into the design of the house, how the builder was chosen, features considered important when choosing a builder, disputes over final costs, type of contract and how the builder could improve the build process.

Positive findings

Every aspect improved from the previous survey, except the ‘overall quality of your home’, which was down slightly.

The vast majority of new homeowners said they would recommend their builder.

Where comments were positive about communication and project management, the average satisfaction levels and ratings were very high.

Choosing a builder

When choosing a builder, the most important factor for new homeowners was being confident in the builder’s quality and reputation, thanks to a recommendation from a friend or family member. Timely completion, fixed-price certainty and having looked at the builder’s previous houses were also important. (see Figure 1)

With the majority of respondents stating quality and reputation as the most important selection criteria, there was a wider range of satisfaction ratings for the various aspects of the build. However, overall the average ratings were higher than most.

Perhaps unsurprisingly, homeowners who stated that the lowest price was an important feature in choosing their builder had the lowest satisfaction scores in the majority of aspects. The only aspect they were not unsatisfied with in this case was the final cost compared to expected cost.

Surprisingly, those homeowners who stated that an important feature in choosing their builder was fixed-price certainty were not the most satisfied with the final cost compared to expected cost at signing contract.

Disputes and call-backs

Some 12.4% of respondents were critical of their builder and 12.1% had a dispute with their builder over final costs. Reasons for disputes varied from being overcharged, extras that were/were not included, items left out of contract or incomplete work, to name a few.

The most common type of contract – with a fixed price (including all trades) with changes requested after signing – has the highest percentage of disputes over final costs. The most common issue was the cost of earthworks or retaining walls being more than expected. Other common issues included hidden costs, council fees and under-quoted provisional costs.

Although the call-back rate – where owners asked their builder to repair defects after first occupancy – was down by 4.4% from the last quarter, it is still high at 67.9% of respondents. The most common source of defect was with paint, with almost 300 of the houses surveyed requiring some type of touch up. Other common defects included doors requiring adjustments, mainly due to sticking.

A number of builders also had poor communication with the new house owner, leading to much lower than average satisfaction and ratings.

Similarly, some builders did not project manage the build to a suitable standard for their customer.

Lessons to be learned

The final section of the survey asked for general comments on the overall performance of the builder. Two common themes emerged:

• The importance of good project management.
• The importance of good communication.

Where they were spoken about positively, the satisfaction/ratings were much higher than when the homeowner spoke negatively about them. Poor communication and project management led to significantly worse average scores for the builder.

A significant proportion of new owners speak critically about their builder. Given that recommendations are such an important source of new work, this should be of real concern. Make sure you discuss costs and expectations thoroughly with your clients – no one likes surprises!

Work also needs to be done on further reducing the number of call-backs. These largely involve work done by subcontractors, indicating a lack of quality control and project management by the builder, which ultimately reflects badly on them.

MORE INFORMATION

For the full study results, see BRANZ SR287 New House Owners’ Satisfaction Survey 2012 at the BRANZ shop: www.branz.co.nz